G-MW announces review to modernise pricing and tariffs

Tuesday 4 May, 2010

Goulburn-Murray Water (G-MW) announced today that it will embark upon a comprehensive review of how it recovers costs from customers in the gravity irrigation areas with the goal of simplifying administration and to ensure G-MW provides clear pricing signals to customers to inform their long term farm planning.

G-MW Managing Director David Stewart said the review will not impact on prices for the coming 2010/11 season but will see G-MW consider and develop approaches to pricing and tariffs that look beyond current 3 to 5 year regulatory horizons.

“The review is a logical, timely and exciting opportunity for G-MW to talk with key stakeholders including DSE, NVIRP and customers about the best way to recover costs and provide relevant pricing signals during the transition to and once we have a modernised irrigation network,” said Mr Stewart

The review will also seek to plan for the impact of reduced water availability expected under the forthcoming Murray Darling Basin Plan.

“Within 10 years every G-MW customer within our Irrigation Areas will be serviced by one of the world’s most efficient, cost-competitive and technologically advanced irrigation delivery networks, with the technology to support more efficient and responsive system management and improved on farm productivity,” said Mr Stewart.

G-MW’s channel delivery network will be transformed into a water superhighway and every customer will be serviced directly from this network or by a connection which is owned by one or more landowners and managed by them.

“This transformation means that for the first time in the history of irrigation in northern Victoria, customers right along this superhighway will enjoy the same levels and range of water services. We need to modernise our tariff and pricing framework in line with these infrastructure changes,” said Mr Stewart.

G-MW has announced the review following discussions with its regulator, the Essential Services Commission (ESC). The ESC has confirmed it will not proceed with the review of G-MW’s three year revenue submission, but will provide an approval on G-MW’s proposed 2010/11 prices.

Mr Stewart said the review is a significant undertaking and will continue for at least the remainder of this calendar year.

“During this process we will engage with all stakeholders and especially our customers. We are looking for pricing frameworks that ensures we efficiently deliver the best outcomes over the next decade and beyond. Obviously we will also continue to work closely with the ESC during this review process to ensure any changes to our strategic direction meets our regulatory obligations,” said Mr Stewart.

G-MW Managing Director David Stewart confirmed the ESC will approve G-MW’s tariffs by 30 June 2010 on the prices G-MW has submitted for 2010/11.

“We have advised customers of these proposed prices at our recent customer meetings and we have emphasised the prices are not locked in until the ESC provides an approval or otherwise,” said Mr Stewart.

“The world has changed and will change rapidly and significantly over the next few years. We need to ensure our pricing structures deliver clear and consistent signals for customers during this period and into the future,” said Mr Stewart.